Well, it’s not folks. Are you concerned about your privacy now? Just wait until you die. If you don’t have a trust that all of your assets are going to be listed out there for everybody to see. I didn’t know that. Everything. Today’s episode is going to explain what that’s all about. You really might want to list.

Welcome to the Seed or Harvest Show, where financial education, real life choices that impact your family, your future, and your legacy. I’m your host, Mario Zaragoza, and on this podcast we get real. We connect everyday people with trusted professionals who break down the tough stuff pensions, tax, planning, insurance. And today we’re going to talk about pros and cons of wills and trusts.

This episode is part of our law enforcement series, and I’m joined by my co-host, Officer Ty, an 18 year veteran of law enforcement here in Phoenix. Our guest today is Cindy Starkey, a powerhouse attorney with 35 years of experience and wills, trust and probate law. You can find her at Cynthia Starkey plc. And she’s guided thousands of families in tough moments of their lives.

Today, we’re answering tough question the pros and cons of wills and trusts and and from that moment there and that I can’t talk, folks. So here we’re just going to turn it on over to someone who can. And she talks for a living out there, litigator and, attorney at law. Here she is, Cindy Starkey. Welcome, Mario. It’s good to be back with you guys again.

Hi, officer. Ty, how are you? Hello. How’s it going? Good. So we talked a little bit about the differences and pros and cons between wills and trust. Last time, last episode. And the, one of the primary ones is the expense. You know, the will is much cheaper upfront, and the trust is more expensive upfront. But then in the long run, the will ends up costing you more.

But the trust ends up costing you less because of court fees and time and things like that. But the other really important difference that I don’t think a lot of people realized is privacy. So a will when you when you open a probate and you have a will or even if it there is no will and it’s a test, a probate.

Everything that you file is a public record. And during the court the during the course that probate estate you have to do an inventory. So your personal representative does an inventory and says these are the assets in the in the deceased person’s estate. They have a house. It’s worth this general amount of money. They have bank accounts where this amount of money that have stock for this amount of money, and it’s all laid out and a public record of what you own.

And then later on that that’s the initial inventory later on, there’s more specific information that you provided with like exact detail and how it’s going to be distributed. And the other thing that’s public record that is really important to know is who’s getting the money. You know, your beneficiaries. That’s all public document. You do the your first filing tells the court everybody who is a beneficiary under the will or anybody who’s interested under Arizona law because they have to be notified.

So there’s a lot of information that people don’t realize ends up in the public domain. If you have to provide an estate now in in comparison, if you have a trust, a trust document is completely private. It’s never filed with the state or with the court unless there’s a unless is contested by one of the, you know, beneficiaries or somebody.

But usually it’s never filed with the state. And in fact, you don’t even usually have to give that trust document to a bank to open accounts and things like that. You give them something called a certificate of trust, which just has a bare bones. Who’s entitled to act on behalf of the trust, who, the beneficiaries are and who, what the name of the trust is and what the powers of the trustee are.

So they don’t get to know how much your estate is worth, how many homes you own, what your bank accounts are. They know none of that. And that’s all completely private. So I think a lot of people don’t really understand that. They put so much more of their information out there. If they don’t, if they go, will, will the will route versus the trust route.

And it’s in in the first episode we talked about, if you didn’t have a will, then it goes to some different kind of probate, but it’s similar either way with a will or without a will. It’s going to the courts once it goes into the courts, it’s public information. Is that correct? That’s correct. With or without a will, it’s gone before.

And privacy is out the door. Yeah. All the time. Yeah. The only time you’re protecting that privacy is if you have a trust E that’s I mean most most cops want some privacy. So that’s a big I think most sure they do proper law enforcement or not. You want. So I want you now hearing that I mean that’s a bigger reason why I’d want to I don’t want to trust.

I mean, there’s a lot of reasons I should have one, but that’s a big one. Just said a I’m private. Yeah, 100%. Yeah. That’s trust. Yeah. Trust are also a lot more flexible than a will. Like a will only takes only kicks in when somebody dies. And then you file the will and you provide their state. But a trust is a living document.

I mean they’re called revocable family trust living. Living wills are not living well. They’re trusts, but they’re living. It’s a living document that can change. And, it takes effect immediately. So if you want to, a lot of people, when they pass away, they don’t really if they have a big estate, they don’t want to give their kids, even if their kids are grown and, you know, they’re 20 years old or 21 years old, if you get $500,000 that your kids can get, you don’t want to get them to get $500,000 when they’re 18 or 20 years old.

So if you have a trust document, you can stagger, you can dictate exactly how that money is passed down. And I always recommend to my clients that, you know, at 18, the children get some portion of it, maybe enough to buy a car, to go to college, to start a business, to go to trade school. And then at 30, they get another big chunk because now they might want to buy a house.

So they might be starting to have kids. So they have additional financial responsibilities. And then maybe when they’re 40 years old and they’re hopefully, you know, very fiscally responsible, then you could give them that big chunk of money so that you know that they’re going to handle it appropriately. Go ahead. I’m sorry to ask you a question, but you kind of you triggered a thought there.

So if someone were to stagger that out, obviously they have to have somebody kind of oversee that money aside from the account. So who is that person? Where do they go find? What are they? What do they have to include in that set of document there? Yeah. That who that person is a trustee. And as soon as you set up a trustee, appoint a trustee and it’s usually yourself and your spouse, and then after you and your spouse are gone, you set up somebody else who’s going to be your successor, trustee.

And that person is typically, you know, one of your kids or a sibling, but it has to be somebody that’s at a different age range, because if it’s a sibling, they may unless they’re younger than you, you know, you might have the same problem with they’re not going to be around, but it could be a family friend. It could be, you know, whatever.

But typically it’s one of the kids or isn’t. It isn’t like family that someone trusts to do that. I assume that there’s people that they can hire to they hire another, turn it, oversee that, or they’re just professionals out there who do just that. There are professionals who do just that. There are fiduciaries. Lots of banks will have fiduciary on.

So if you have all of your money, you know, maybe Chase Bank and you don’t have anybody that you trust in your family to do, you know, to act as trustee, you could appoint them. They take a percentage of the estate. So it’s a lot more expensive. But you also, you know, have somebody who’s relatively, you know, not biased against you don’t have infighting between if you have one child that you point in, the other two, you don’t you might have some disagreement.

Can you put in stipulations on the trustee? So let’s just say there were two siblings, but I wanted this one particular child to be my trustee. But I want it. But I want to make sure that that trustee didn’t just go to it, go rogue within the trust. Can I put stipulations prior to while I’m still here? So the trustee can’t go rogue?

So the trustee has fiduciary responsibilities under Arizona law. And if the trustee goes outside of that and is taking advantage and maybe using the money for their own, you know, their own personal, their own personal self instead of sharing it with other beneficiaries, that’s when you end up in court and you end up having litigation over at probate litigation.

But you every trustee has fiduciary responsibilities, and they have to act in the best interests of all of the beneficiaries, not just themselves. And there are duties that are outlined in the trust agreement, what they can and cannot do. And so if you know somebody, well, that’s really probably one of the most important things about, when you form your trust is you really have to think about who you’re going to appoint.

And a lot of people, their knee jerk reaction is, I’m going to appoint my oldest kid. Well, your oldest kid might not be your most financially astute, might not be your most organized, might not be your most trustworthy. You know, maybe have a substance abuse issue or, you know, going through a bad divorce or mental health issue. So you really have to think about who you’re going to appoint because they have a lot of responsibility.

We went through this with my, my mom’s side of the family in a sea of experiences. Yeah, well, kind of. It was the. Yeah. Okay, good. Yeah. Long story short, but it was kind of that it was one of the one of the siblings thought that they were in charge of everything. Nobody was appointed. So it was kind of like constant fighting between the siblings for the it was a it was a mess.

It sounds like there’s probably a whole episode within itself right there. You need to have a conversation. How do you protect yourself from a trustee going rogue? Right? Yeah, yeah. You know, I actually have a case with siblings and there was no well, the he was not acting under a power of attorney. And, he was just, you know, is mom needed some extra help and he just jumped in there and was handling her accounts and took basically all her money.

And now we have a lawsuit. But that’s what happens when, you know, there he wasn’t acting under a power of attorney. So he didn’t have those fiduciary duties. And we have to litigate under different law, you know, whether he had undue influence over his mother, whether she’s a vulnerable adult or incapacity, a whole new can of worms, way more expensive.

A lot of the estate was getting eaten up by attorneys fees, unfortunately. But that’s why if you have documents in place and they’re, you know, everything’s set out and you’ve really thought about who you’re going to appoint, you know, if which of your children gets along the best with everybody you know, or is there one person who’s really gonna, you know, set off the other children?

You really have to think about your family dynamics when you decide who you choose. Or maybe you don’t choose any of your kids, and you go with a cousin or an aunt or a family friend or somebody that you know isn’t going to, you know, be in the middle of things and stir trouble. What a mess it is a mess.

This is I, I just can’t imagine. I’m so thankful there’s people like you out there, Cindy, who want to deal with this mess. Because this just sounds like a train wreck. Yeah. So even more reason why I. Obviously, I need to get a trust, because I know, but you can it out. Yeah. Oh. Oh, we’re all this big money.

The last thing that I probably mentioned about, you know, what’s good about a trust is, over a will is, when you have a will and you’re at the end of, you’re ready to close your probate, everybody just gets their money, you know? And I said, you can’t stagger like you could with a trust. But you also might have children who have substance abuse issues who are going through a bankruptcy, who, you know, just got in a terrible car accident and maybe have a lawsuit hanging over that head or lawsuit for something else.

So if you have, within your trust, I acknowledge all my trust documents have a spendthrift provision, then that, protects, that keeps all the money in the trust. The trustee can not distribute money to somebody who’s going to one of the beneficiaries, who’s going through a lot of problems, and that protects them while they resolve their problems, get their substance abuse issues under control.

And then when the trustee thinks that they’re capable and ready to handle the money, then they can dole it out slowly. Or they could dole it out altogether. And that’s just a provision that even if you have it staggered and you say they get it yet, you know, summit 18, summit 30, summit 40, if there’s problems going on, the trustee is aware of it.

They can keep control of the money to make sure that it doesn’t end up in a creditors pocket instead of in their kids pocket where you really want it. Okay, so there’s a lot of like, you do what’s called the spendthrift spendthrift. Yeah. Spendthrift provision because sometimes it’s just kids that are are terrible with money. So you want to the trustee has complete power to say no, you’re not handling yourself very responsibly.

I’m not going to give you your big chunk of money, but they can come to you and say, I have this medical expense. And if the trustee leaves them, then they can hand out money or if they have an educational expense or they’re starting a business, the trustee has complete control, really, to do whatever’s in the best interest of that beneficiary within, the provisions of the document.

Never knew that. Yeah. There’s all kinds of crazy things going on. Wow, I don’t know. I mean, you’re just kind of. You’re you’re a lot of things spinning in my head. If you don’t, you have more questions pertaining to spendthrift, because otherwise I have a question. I want to go back to that. I heard you said so.

I you know, you mentioned about okay, so just because you have a trust, it sounds like I always assume that you could contest like a will you hear people contesting a will or something? It sounds like you. And then I heard you said that you could also contest a trust that is that accurate. That is true. And you could contest either of them.

And that’s why it’s a really important to put in a no contest provision in your wills and your trusts and that kind of heads off battles that are not legitimate battles between siblings or, you know, family members who maybe just don’t get along, want to fight about everything. So if somebody contests, will or a trust, they can be completely disinherited.

So that’s a big incentive not to contest a trust or will. What’s the name of that provision? No contest provision. So that in a no contest, if you put that in there and somebody does contested, that can kick him out of it completely and they could lose everything, it’s what they were being if they have a legitimate right.

So then you have to have a judge determine whether or not it’s legitimate. You’re correct. So it under Arizona law, it’s if you have probable cause to contest, then the judge will say, okay, you can contest it because I see that there’s probable cause. I’m not going to just even if you lose the case, if you, you know, I can’t think of a scenario under my, you know, on the top of my head.

But if you think that your, your sibling did something wrong and mishandled some of the money or didn’t give you enough, and there’s a legitimate reason why you feel that way. And you bring that to the court. The court, even if you lose the court could say, oh, I could see how you would feel that way. And I’m going to say that you had probable cause or I’m not disinherited.

And you conversely, if you just had no reason, you just had bad blood between siblings and you just want to cause trouble and try and get as much for yourself as you want, as you can, then you could go to the court and contest the will and the judge could. You know, the judge has to determine whether you had probable cause.

And if the court said you didn’t have probable cause, you’re just being a jerk, then you’re disinherited. Crazy. Yikes. Yeah, and that can be so you can put that clause in with a will or a trust. Yeah, yeah. And I it’s in all my wills and trusts. So is that just kind of standard regardless where you go or do not.

Oh. I mean I assume if you go to an attorney they’re going to recommend that. But I know I’ve seen like a lot of these, third party legal services. We do your will for free, right? I’ve always been kind of suspect of that situation. Like, what are what aren’t they paying attention to? Yeah, right. Go to Legal Shield or what are these.

What are these online legal forms Legalzoom. What’s the legal zoo? And there’s like a bunch of them out there and I’ve always been leery of like, well, all right, well, so what did I do? I don’t need an attorneys. Yeah. So that would that be a question then if I were to go on right now and go on like Legalzoom, would they have stuff like that in there that I’m like, I don’t even know.

Does like Legalzoom like, explained that to you? Like, if, hey, if I’m going to, I’m going to fill out this trust paperwork. And if you put this, this in there that I would assume they probably don’t explain it that well. Or do I don’t know, I’ve never went on there, so I have no idea. I mean, all these little bombshells that are saying within this situation, I mean, it sounds like, hey, more reason why save the I mean, it can’t what the 500.

But I mean, I mean that’s a pen you down but like, what’s the average cost of a well opposed to a trust. So what is the average cost. You know, average cost. What would you say like. Well it’s it will vary so tremendously depending on what the attorney bills out at. I like to do mine is a flat fee because I don’t want, I don’t want my client not to ask me questions.

I don’t want them to worry about picking up the phone and think that, oh gosh, every minute I’m because we bill in six minute increments. So if you’re if I’m billing by the hour every six minutes, I talk to you. Another charge is tacked on. I’d prefer not to have that so that, you know, I just quote a flat fee, and, it is what it is.

And no matter how much time I have to talk to you or your spouse or your kids, if they have questions, no matter how many times we have to go back and forth with the documents or questions you have, it’s all included in the flat fee is that standard, or is that something that you do is a pretty standard amongst your your side of the profession?

If you’re not sure if you’d say it was 5050 or not, but I think a lot of people offer a flat fee because I think a lot of, clients don’t want to not know how much it’s going to cost. Yeah. You know, if you have a very comp, I don’t do it sometimes. If you have a very complex estate and I have some people that want to leave, money to, their grandchildren and, you know, some of them get this amount of money and some get this amount of money, but if they’re doing this, then they don’t get anything.

And if, you know, I want to leave something to my brother. Also, if it’s really complicated, most people are most people. The scenario is husband and wife. You leave it to your spouse or everything to your spouse. When that spouse goes, it’s divided to the kids. That’s when a legalzoom or you know, a very simple will wouldn’t be terrible because it’s pretty basic.

And in fact, I’m putting together some forms for my website where people can go in the middle of the night if they wanted to answer a questionnaire, and it will populate a will or trust for them. And they can print those and sign them in front of a notary, and it’ll be a done deal, and they’ll pay me a flat fee.

And then if they want to ask me questions, if, as they’re doing, the documents are like, oh, I really wonder about this, I wonder then they can hire me at an hourly rate or, you know, at a different flat fee rate so that they can get their questions answered. Because I think a lot of people don’t realize how, how complicated they are.

There’s a lot of questions and there’s a lot of it’s very, individualized for especially when you have blended families, then things get very crazy and people, you know, want to treat their kids and their spouses kids differently. Yeah. So it can be it can be very complicated. And then then you’re probably not going to get a flat fee.

An agreement you’re going to pay by the hour because you want it done bespoke perfectly to fit your individual needs, which makes total sense. So I mean, you know, and who wants if you’re going to do it, you want it done, right. Yeah. I mean if you’re going to do that trouble doing it. So even at a basic level, start with a will.

And like we talked to state, planning attorney like yourself to I would like to think that everybody does things correctly, but I know we all know that’s not the case. Actually, I do just made me remember that I had a client who I did all of his family’s trust documents, the mom and dad, and then all the siblings and their wives.

And as they grew up, you know, and got married, I did all of their trust documents also. And I got a call one day that, they wanted there was something wrong with the power of attorney, and the court was rejecting it for some really reason. And I panicked thinking that there’s something wrong with my document because I’m like.

So I went back and looked and I’m like, oh, that’s not even my document. So where did you get this from? And he goes, oh yeah, I went, I remember now, I went on zoom and I did a zoom and it wasn’t notarized or something like that. So it was completely ineffective under Arizona law. So I would hope that a zoom or you know, one of those legal like a what did you call what did you say, Mario?

Who was that firm? The facilitator to some something. Yeah, yeah, there’s a bunch of them out there. You’d hope they do it right. But you don’t know if you don’t have an attorney overseeing it. You don’t, do you? Not 100. You’re not 

Right. Random like if you do something and it’s and you fight, you fail to do something incorrectly. I have legal recourse against you. Correct? Yeah. It’s even more reason why to, you know, split the money. That way you can make sure you’re protected now. Right? So, I mean, not that we want to sue our attorney, but it’s same time.

The pressure is on an option. Oh, cool. Well, again, this is, I don’t know, I this is you just keep opening more and more doors. So, I’ve got topics of conversation because this is, this is a lot broader subject than I really. Yeah. Thought stuff and more more to it. So but you know, we’ve been this is a good jump off point I think.

And Cindy, thank you again for jumping on and another one in the, in the bucket here. And so thanks for jumping on our year end up in Washington currently. Right. Currently still practicing law in Arizona though. Right? Right. So thanks for jumping on via zoom. We appreciate that. And if you have any, look forward to having you in the studio here and jumping on.

So yeah, you know, in jump, you know, listeners Yahoo’s lap before the show, I just have to hear this. So we’re here for so I appreciate you in our Washington and, take care, guys. Thank you. But,